Victorian energy savings scheme target increase to 2025 with more upgrades eligible for financial incentives

PRESS RELEASE

The Energy Savings Industry Association (ESIA) welcomes the release yesterday of the Victorian Energy Upgrades program Regulatory Impact Statement (RIS) for target setting from 2021-25 which indicates the most ambitious targets since the program’s start in 2009. The cumulative impact of the favoured option will avoid 40.6 mega tonnes (Mt) of emissions in Victoria and be a significant lever in achieving the state’s net zero emissions target by 2050.

“We welcome the sensible ambition that will deliver a net benefit of almost $4,680 million in Net Present Value (NPV) over the period. This successful program is the largest of its kind in Australia and will continue to drive innovative technology transformation,” said President of the ESIA, Rod Woolley.

Households participating in the program during 2021-2025 are expected to save $3.12 billion on their energy bills. Commercial and industrial businesses are expected to save more than $8 billion on their energy bills.

Modelling indicates that activities carried out under the program during 2021-2025 will ensure energy consumption in 2025 is 10 percent lower than in 2021. Up to 50 per cent of the 2025 target is expected to be delivered through fuel switching activities.

According to RIS, while the 2016-2020 target required an approximate 17 per cent increase in energy savings annually, the 2021-2025 target will require an average annual increase of 22-27 per cent.

More types of energy upgrades will be eligible for financial incentives to help households and businesses save energy and money and reduce greenhouse gas emissions.

The RIS recognised the important opportunity for demand reduction.

A review of the target metric will be considered in 2020. This may open the way to more demand side opportunities and perhaps, as the ESIA advocates, a peak demand reduction mechanism as was committed by the NSW government on 22 November in that state’s electricity strategy.

“We look forward to continued engagement with the Victorian government to ensure the State embraces this critical window of opportunity to drive energy savings sooner for Victorian households and industry,” said Mr Woolley.